Last-resort law divides

The union in one of the country’s longest-running industrial disputes has welcomed Labor’s calls to incorporate last-resort arbitration into the industrial relations system but experts fear it may signal a reversion to wide-scale 1970s-style arbitration.

Delegates at the Australian Labor Party National Conference over the weekend amended the party platform so that the forthcoming review of the Fair Work Act, expected to be announced either today or tomorrow, will consider incorporating a last-resort arbitration clause into law.

At the moment, stalled negotiations can be sent to arbitration if the dispute is seen to be hurting the economy or the public, as in the Qantas grounding and Victorian nurses’ dispute. Arbitration can also be used if both parties agree after conciliation.

But Australian Manufacturing Workers Union NSW secretary Tim Ayres said the two-year-old dispute between
Cochlear
management and process workers was “emblematic of the problems with the current framework and the need for last resort arbitration as fallback".

The union and management appeared at the Fair Work Tribunal yesterday to try again for conciliation, which Mr Ayres said was not successful as the company was “intransigent, and showing no signs they have any intention of reaching an agreement".

Cochlear CEO
Chris Roberts
declined to comment on the dispute or the mooted change to the Fair Work Act. But industrial relations experts said there was a danger in having arbitration as a fallback.

Blake Dawson industrial relations partner Steven Amendola said: “If the system of so-called enterprise bargaining is predicated on the ability to resort to arbitration, then what you are going to see is a reversal of the gains of the past 25 years and a return to the 1970s-80s style of arbitration."

Use of arbitration if a dispute was considered to be hurting the economy or public interest had existed in legislation since 1993, he said.

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The current system also had a mechanism to head to arbitration at the tribunal if, after attempts at conciliation, both parties agreed.

University of Adelaide industrial relations professor Andrew Stewart said it was legitimate that after two decades of enterprise bargaining both employers and union groups were questioning its operation and calling for the need to make it more responsive and innovative to deal with the modern economy.

He said issues raised by requiring both sides to engage in “good faith bargaining" but not requiring them to reach agreement had led to a few cases of prolonged disputes, though they were rare.

But Professor Stewart, who has been tipped by some to undertake the government’s review, said it would be difficult for the current enterprise-bargaining system to continue to work if parties could revert to compulsory arbitration in all disputes, as many groups would see it in their best interest to hold out for arbitration rather than to negotiate,

“But the other question is do we want parties in protracted disputes beating themselves bloody in economic combat?" Professor Stewart said.

“[The government] needs to find a balance that doesn’t send every dispute to the tribunal for arbitration, but deals with these long, protracted disputes. It is a question of whether the government turns the tribunal’s power up a notch, or a lot."